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Key Takeaways
- CDs have a valuable perk that even the best high-yield savings accounts don’t have: a guaranteed return that’s yours to keep, no matter how many times the Federal Reserve cuts interest rates.
- A rate reduction is expected from the Fed tomorrow—with additional cuts possible in 2025. Thus, CD returns could dip later this week.
- While the best CD rates have softened from the 20-year peak notched last year, you can still earn historically high returns from 4% to 5.50%.
- $10,000 deposited in a top-paying CD can earn hundreds—or even thousands—of dollars in interest. See our calculations below for what various deposit amounts can earn in different terms.
- While the best high-yield savings accounts pay up to 5.00% right now, those rates will fall with each Fed rate cut.
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Why CDs Are a Wise Move Right Now
Thanks to the Federal Reserve’s historic 2022-2023 rate-hike campaign to combat post-pandemic inflation, certificate of deposit (CD) rates surged to 20-year highs late last year—reaching above 6%. Now that inflation has cooled, the Fed has shifted to a rate-cutting phase, nudging CD rates a bit lower as a result. However, with the top nationwide rate still at 5.50%, CD returns remain historically high—and are, therefore, an attractive option for your cash savings.
Unfortunately, the days of 5% CDs are almost undoubtedly numbered. That’s because the Fed is expected to follow its September and November cuts to the federal funds rate with another interest rate reduction tomorrow. The central bank could also cut its benchmark rate further in 2025.
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This predicted downward pressure from the Fed is precisely why today’s top CDs are such a smart move right now. The annual percentage yields (APYs) you can grab today are likely to be the best you’ll see for a while. So, the sooner you can lock in, the better.
How Much Can I Earn With $10,000 in a CD?
The amount of interest you can make by committing to one of today’s CDs depends, of course, on the term you choose and the particular CD you open. But using a common investment amount of $10,000, we demonstrate below what you can earn by opening a top-paying CD in any of the major terms.
Earnings on a $10,000 CD Opened at Today’s Top Rates
| Top Nationwide Rate (APY) | Balance at Maturity | Total Earnings | |
|---|---|---|---|
| 6 months | 4.85%* | $10,240 | $240 |
| 1 year | 4.65% | $10,465 | $465 |
| 18 months | 4.50% | $10,683 | $683 |
| 2 year | 4.30% | $10,878 | $878 |
| 3 year | 4.25% | $11,330 | $1,330 |
| 4 year | 4.20% | $11,789 | $1,789 |
| 5 year | 4.25% | $12,313 | $2,313 |
How Much Can I Earn With Other Amounts?
Maybe $10,000 is more savings than you can afford to commit, and $2,500 or $5,000 is more your speed. Or maybe you have a bigger amount—like $25,000—to invest. Below, we’ve laid out the earnings you could expect from those different deposit amounts.
| Top Nationwide Rate (APY) | Total Earnings on a $2,500 CD | Total Earnings on a $5,000 CD | Total Earnings on a $25,000 CD | |
|---|---|---|---|---|
| 6 months | 4.85%* | $60 | $120 | $599 |
| 1 year | 4.65% | $116 | $233 | $1,163 |
| 18 months | 4.50% | $171 | $341 | $1,706 |
| 2 year | 4.30% | $220 | $439 | $2,196 |
| 3 year | 4.25% | $332 | $665 | $3,325 |
| 4 year | 4.20% | $447 | $894 | $4,472 |
| 5 year | 4.25% | $578 | $1,157 | $5,784 |
CDs Have a Catch—But Use It to Your Advantage
There is one important trade-off to CDs—they carry an early withdrawal penalty that you’ll incur if you decide to cash out before its maturity date. Sometimes, these are relatively mild, but other times, they’re quite harsh. Since every bank and credit union has its own policy, be sure you find out how any penalties will be calculated before you commit to a CD. And if two CDs are fairly similar in rate, go with the one with the less onerous penalty.
However, there’s a silver lining to early withdrawal penalties. Because cashing out early will cost you, it can be an effective deterrent to spending your savings on something you didn’t previously plan for. So, if you choose your CD term carefully, keeping your money on deposit until maturity will not only help you keep your money saved but also maximize what you earn on those savings.
Daily Rankings of the Best CDs and Savings Accounts
How We Find the Best Savings and CD Rates
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account’s minimum initial deposit must not exceed $25,000.
Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don’t meet other eligibility criteria (e.g., you don’t live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
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